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Renovation

Renovation loan "Modern"

The loan is provided by "Converse Bank" CJSC (hereinafter referred to as the Bank) to individuals who are RA citizens and/or residents for the renovation of private houses or apartments.

Loan currency

AMD, USD, EUR

Loan amount

2,000,000 - 30,000,000AMD or equivalent foreign currency

Term of Loan

In case of AMD - 24 - 120 months
In case of USD and Euro - 24-180 months

Annual loan interest rates1 by currency and loan / collateral ratio

Loan/collateral

Interest rate

US dollars

Euro

AMD

PTI2

Guarantor

Up to 50%

Nominal3

(CBFR4 + 9.17)%
currently - 9.50%

(CBFR + 8.80)%
currently - 8.50%

(CBFR + 9.65)%
currently - 17.38%

USD/EUR ≤50%
AMD ≤60%

1 guarantor / co-borrower

Actual5

10.24-18.34%

9.15 - 17.14%

19.17 - 24.00%

50.1% - 70%

Nominal

(CBFR* + 9.67)%
currently - 10.00%

(CBFR + 9.30)%

currently - 9.00%

(CBFR+ 10.65)%
currently - 18.38%

USD / EUR ≤45%
AMD ≤50%

Actual

10.78-18.94%

9.69 - 17.74%

20.35 - 24.00%

1 The annual nominal interest rate set in the table is calculated on the basis of the current CBFR rates effective at the time of loan disbursement; it is fixed for the first 24 months in case of foreign currency loans and for the first 12 months in case of AMD loans, after which the interest rate becomes floating.
2 PTI - The ratio of the maximum amount of monthly repayments of loan principal, interest, service and insurance premiums (if any) as defined by the repayment schedule to the total net monthly income of the borrower/co-borrower.
3 For loans in USD and Euro - should the loan/collateral ratio not exceed 70%, the established nominal interest rates are reduced by 0.5 percentage points if all of the following conditions are met at the same time:

  • PTI ≤ 40%, OTI2 ≤ 50%, and
  • The loan term is at least 120 months

The borrower insures the pledged property at least in the amount of the loan balance.
OTI2 - The ratio of the total of maximum amount of monthly repayments of loan principal, interest, service and insurance premiums (if any) on the loan and on all other loans in the name of the borrower/co-borrowers, as defined by the repayment schedule, to the total net monthly income of the the same persons.
4 CBFR- Converse Bank Floating Rate It is set twice a year by the Bank on the basis of the primary indicators, and in the event of unavailability of the latter - based on secondary indicators. In case of change, the nominal interest rate of the existing contracts changes no sooner than one month after the borrower is notified.
Key indicators: In case of AMD, the yield curve of 180-day government bonds of the Republic of Armenia, published by the Central Bank of Armenia at https://www.cba.am; In the case of USD or EUR, respectively, the "6-month ICE LIBOR US Dollar" and "6-month ICE LIBOR Euro" benchmarks, published by the Intercontinental Exchange (ICE) at https: // www. theice.com website:
Secondary indicators: In case of AMD, the refinancing rate set by the CBA; In the case of the US dollar, the Federal Reserve Bank interest rate on the Federal Funds or the upper limit of the range; In the case of the euro, the European Central Bank's marginal lending facility rate.
Moreover, in case of inaccessibility of the main indicators and the use of secondary indicators , the nominal interest rates on CBFR financing established based on the secondary indicators shall be set so that the nominal interest rate remains unchanged under the change in the fixed component of the financing interest rate.
The specified CBFR rates are published on the Bank's official website at https://conversebank.am/en/kbht/ and are available on the Bank's premises.
The Bank may change the floating rate of this loan no more than twice a year. The maximum floating rate increase threshold is set at +/- 4 percentage points. The CBFR values can be rounded up to one hundredth.
5The actual interest rate, in addition to the fees specified by the Bank, includes other fees required to obtain the loan: collateral valuation, single statement, notary charges and pledge registration fees.
The actual interest rates were calculated based on the CBFR amounts as of the date of the bulletin update - AMD: 7.73%, USD: 0.33%, Euro: -0.3%. 

General provisions and conditions

 List of payments made by the customer

Fee for loan application review

5,000 AMD (charged once when entering the loan application)

Fee for loan disbursement

- in case of the loan term up to 120 months inclusively - 0.5% of the amount,
- in case of more than 120 months - 1% of the amount,
Minimum AMD 25,000 (charged as a lump-sum before the loan disbursement).

Loan account service fee

2,000 AMD (monthly)


Costs for collateral valuation

8,000 - 10,000 AMD

Collateral insurance (applicable in case of setting the nominal interest rate of the loan below 0.5 percentage points)

0.13% - 0.15% annually on loan balance

Single reference

10,000 AMD

Notary validation

20,000 AMD

Registration of the right of pledge in the RA Cadastre Committee

27,000 AMD

Tariffs for savings accounts opened for the borrower in case of loan disbursement

In case of loans in AMD

For one savings account in AMD

opening

0 AMD

annual service

0 AMD

In case of foreign currency loans

One savings account in AMD and one in foreign currency (according to the loan currency)

opening

0 AMD

annual service

0 AMD

Other terms in accordance with the provisions on opening and servicing of Bank accounts.

If the customer already has savings accounts in the mentioned currencies, new accounts may not be opened, instead the terms of the existing ones will be edited accordingly.

Early repayment of the loan

The borrower has the right to repay the loan in whole or in part in advance, including through refinancing.
In case of early repayment of the loan amount or part of it, the Bank will reduce the total cost of lending, including the total interest payable under the loan agreement and service charges.
At the borrower's discretion, the Bank will reduce the amount of monthly payments in proportion to the amount repaid in advance, leaving the loan repayment period unchanged, or reduce the loan repayment period, leaving the amount of monthly payments unchanged.

Fines and penalties

In case of breach of the repayment terms stipulated in the contract, the Borrower shall pay a fine to the Bank at the rate of 0.13% of the overdue amount for each day of default.
Repayments of overdue liabilities are repaid in the following order: fine/penalty, interest, service fee, principal amount.
In case of early loan repayment, the borrower pays a fine to the Bank.

  • 0.6% of the early repayment amount of the loan, if the early repayment takes place during the first year of the loan agreement,
  • 0.4% of the early repayment amount of the loan, if the early repayment takes place during the second year of the loan agreement,
  • 0.2% of the early repayment amount of the loan, if the early repayment takes place during the third year of the loan agreement.

No penalty is envisaged for early repayment of the loan for the remaining period of the loan agreement.

Consideration time

At least 7 days prior to the conclusion of the loan agreement, the Bank will provide you by hand or by mail a loan agreement proposal and a draft loan agreement. The proposal to conclude a loan agreement is valid for 7 business days from the day following the date of its submission to the borrower.

Loan repayment methods

1. Annuity (Equal monthly repayment), with principal and interest accrued in variable portions.
2. "Spring" (decreasing monthly repayment), in which the principal amount is included in equal portions, and accumulated interest is variable.

The loan can be provided with a grace period of up to 12 months , during which the borrower can receive all or part of the loan.
The grace period is provided from the beginning of the loan term, during which only the interest accrued on the balance of the received loan is subject to repayment.

The loan can be provided on phased basis (maximum in 5 disbursements), moreover, in case of the loan amount exceeding 10 million AMD / equivalent foreign currency, the condition of phased disbursement is mandatory.

Collateral security

1. Pledge of the real estate under construction (/ re/construction)
2. At the request of the bank, also pledge of other residential real estate
3. At least one guarantor or co-borrower. The borrower's family member can act as a co-borrower or guarantor.

Loan/collateral ratio

Up to 70%
The estimated realisable value of the collateral is taken as a basis

Requirements to the Guarantor

Legal entities and individuals may act as guarantors.

Guarantor:

  • Must have a stable proven income or ownership/co-ownership for immovable and/or movable property,
  • At the time of loan disbursement may have a maximum of 3 current guarantees against liabilities of other persons whose liabilities are not overdue;
  • should not have problem loans at the time of loan disbursement, nor overdue liabilities of 30 days or more during the last 12 months;
  • cannot simultaneously act as a co-borrower.


Explanatory information on the guarantee

If the borrower fails to fulfill his/her obligations, the guarantor will pay on behalf of the borrower, the guarantor's credit history will deteriorate as well, and the guarantor may be deprived of his/her property.

Converse Bank:

  • Will provide the guarantor with an example of loan and guarantee agreements and a repayment schedule,
  • The communication will be carried out in the manner chosen by the guarantor,
  • notify at least 7 days in advance of the change in the terms of the contract,
  • Will send reminder of existing obligation 1 day in advance
  • In case of delayed repayment of the loan, will notify the guarantor not later than within the following day.

The guarantor has the right to:

  • At any time request the Bank for information on the size of the loan balance,
  • get a refund of loan-related payments made, as well as of other losses incurred on behalf of the borrower.

Limitations

1. The terms and conditions of the borrower also apply to co-borrowers.
2. PTI ≤ 45 - 60% depending on the "loan / collateral" ratio.
3. At the time of applying for the loan, the sum of applicant's age and loan term should not exceed 65.
4. The age of the pledger (if different from the borrower) at the time of loan application should not exceed 70 years.
5. The apartment owned by the borrower is being renovated
6. The borrower undertakes to complete the renovation work within the period specified in the contract, but not later than within 1 year, after which the purpose of the loan is subject to monitoring.
7. Credit history requirements.

  • At the time of considering loan application, the borrower/co-borrowers should have no overdue loans, as well as existing loan obligations classified stricter than "standard" class (including guarantees).
  • During the year preceding the loan application date, the applicant should not have classification for any loan under stricter than "non-standard" class, as well as should not have arrears in terms of all for a period of up to 25 days in total (conditions do not apply to guarantees).
  • Persons running a common household with the applicant should not have any existing overdue loan liabilities or classification for any loan under stricter than "non-standard" class (including guarantees) at the time of loan application review. 

Deferral of regular repayment

Deferral of regular repayment may be provided based on the borrower client's application. The purpose of deferral of repayment is to allow for non-payment ("missing") of the regular repayment established by the loan schedule upon temporary change of financial flows (vacation, etc.), in which case the total amount to be repaid for the given month (principal + interest) is proportionally redistributed to repayments of subsequent months (In case of monthly service applied, it is also redistributed and added to the service amount of the next regular repayment month).
The following restrictions apply on the applicability of the deferral on regular repayment :

  • The possibility of deferral of regular repayment is applicable for loans serviced for at least 6 months.
  • Deferral of regular repayment is not applicable during the grace period, as well as in the case of loans with a revised loan schedule.
  • At the time of filing the application for deferral of the regular repayment, there should be no more than 6 days in arrears in total on the loan under consideration; the class of the loan should be "standard", the borrower should not have overdue liabilities to the Bank, as well as there should be no payment delay on the repayment preceding the one under consideration for deferral.
  • In case of loans with a term of less than 60 months, the deferral on regular repayment can be granted no more than once during the entire loan term.
  • In case of loans with a term of 60 months and above, throughout the entire term of the loan (except for the last 2 years defined by the loan schedule) the deferral of regular repayment may be granted for up to 5 times, however not more often than once during the reporting year.


Example of calculating interest rates
In case of loan with the following terms and conditions:

Loan amount

10,000 USD

Nominal interest rate

11%

Repayment period

7 years

Repayment type

Annuity


Interest amounts structure

Monthly repayment (principal amount+ interest)

171

Total interest

4.383

Total sum of repayments

14.383

Loan interest is calculated based on the nominal interest rate applied to the deductible balance, and the actual annual interest rate shows how much the loan will cost you when you make timely interest payments and all the related mandatory fees and payments related to loan disbursement.
The procedure for calculating the annual actual interest rate can be found at :

Valuation of collateral

The pledged is subject to valuation by one of the property valuation companies cooperating with the Bank. The valuation company is selected by the Customer. The report on appraisal of market/realisable value of the property is valid for 2 months from the report date. An additional revaluation may be required if necessary (e.g. price changes).

List of valuation companies

Collateral insurance

In order to meet the conditions for setting the nominal interest rate of the loan below 0.5 percentage points, it is necessary to annually insure the pledged real estate in the amount of the loan balance by one of the insurance companies cooperating with the Bank, moreover, the customer acts as the beneficiary.

List of insurance companies

Communication with the Bank

You have the right to communicate with Converse Bank CJSC in any format at your discretion - by postal mail or by electronic communication methods. It is most convenient to receive information electronically, as it is available 24/7, free from the risk of loss of paper-based information and ensures confidentiality.

Provision of statements, references and other information (including VAT)

  • Provision of a statement by the method preferred by the customer, at the frequency defined by the RA legislation and / or by the contract: 0,
  •  Provision of additional statement on mortgage loans (including submission to the RA State Revenue Committee) 4 times a year, for the period specified by the customer: 0
  • Provision of the statement in addition to the periodicity defined in the previous points1:

-dating back up to 3 years - 1,000 AMD  
-Dated back to 3 years and more (in case it is available in the bank ) - 3,000 AMD 

  • Statement1 for submitting to different institutions

- In case of accounts opened within a month 2  5,000  AMD
- In case of accounts opened earlier - 3,000 AMD 

  • Reference based on the application submitted through the Bank's website -  3,000 AMD
  • References / Letters

On transactions made
- For transactions dated back up to one month - 3,000 AMD
- For transactions dated back more than one month -  5,000 AMD
Notice of agreement on consecutive pledge/alienation of property pledged in the Bank - 6,000AMD  for each pledged property

  • Transaction support documents and copies of other documents (for each document)

- Dated back up to 1 month - 1,800 AMD
- Dated back up to 1 year -  3,000 AMD
- Dated back more than one year -  12,000AMD

Tariffs for other services (including VAT)

  • Mail delivery of statements or other documents

In the Republic of Armenia and Artsakh - 0
International
- Tariff set by the shipping service provider, if established by law and contract.
- In other cases, the fee set by the shipment service provider +  1,500AMD

  • Delivery of references or other documents via Ordered mail shipping

- Within Armenia and Artsakh- 3,000AMD 
- International - fee set by the shipment service provider +  3,000AMD

  • Provision of Bank consent for registration of family members at the address of pledged real estate (regardless of number of registered persons) -  3,000 AMD
  • Granting consent for modification of documents on real estate property pledged with the Bank3: 0.5%, minimum AMD 12,000 , maximum  60,000 AMD
  • Granting consent for the lease of pledged real estate property- AMD 12,000
  • Partial release of pledged property based on the application of the pledgor or the borrower (except for the pledge of cash as well as unallocated metal accounts) - 20,000 AMD (per property)
  • Loan terms revision4 - 0.5%, minimum 12,000 AMD

1 In case of simultaneous provision of a statement and reference to the same Customer and charge envisaged for the reference, the charge will be collected for reference only.
2 In case of more than one active account, the opening date of account which has been opened earlier is taken into consideration irrespective of whether or not included in the statement.
3 The tariff shall be calculated on the basis of the estimated initial value of the collateral.
4 The tariff is calculated based on the amount of loan provided. The tariffs are set at the time of submission of the application by the customer for revision of the loan terms.

Required documents 

1

Loan Application Form

2

Identity documents of the borrower, co-borrowers, persons running the common household with the latter, guarantors, pledgors, Public service number or a certificate issued by the body maintaining the state population register on not receiving a PSN (not required if an identification card is submitted)

3

A reference to the place of residence with the indication of family members living together.

4

Certificate from the workplace, with date of issuance as of the date of submission to the Bank should not date back to more than 20 calendar days (a copy of the annual individual report submitted by the employer may also be required)
Such certificate may not be required if the applicant has received his/her salary through the Bank for at least 6 months prior to applying.


4.1

In the case of other non-business activities (eg investment activities, leasing of property, investments in deposits, etc.), a reference of income from those types of activities should be submitted.

4.2

In case of entrepreneurial activity:

  • Reference on income received from business activities - for legal entities
  • Financial analysis for sole proprietors and individuals

In case the applicant is a sole proprietor, a reference from the State Revenue Committee on the latter's obligations to the state, and in case of engaging in activities requiring licensing or permission to carry out certain activities, also a relevant license and/or permit, if the latter is a significant factor influencing the borrower's income.

5

Borrower / co-borrower property ownership certificates on the properties owned by them

6

Original of the ownership certificate of the property under construction/renovation/ reconstruction, grounds for acquisition (sales contract, inheritance certificate, etc.) and identification documents of the owners, certificate of marriage, divorce (if any) which should be submitted prior to the application for the relevant loan

7

Unified reference on the Real Estate Unit provided by the RA Cadastre Committee on any encumbrances of the pledged property (submitted after the loan is approved)

8

Marriage, Divorce Certificates (if available) of Borrower/pledgers

9

Preliminary valuation conclusion/act on collateral is submitted before the loan is approved

10

Estimate of the planned works, and in case of implementation of works requiring a construction permit, appropriate construction permit indicating the deadline for completion of works

11

Consents by the borrower, co-borrower, guarantor, pledger on making ARCA request and ACRA reports (prior to loan approval)

12

Other documents required by the Bank.

13

Within 12 months after the date of receipt of the loan the borrower should submit to the Bank the assessment act of the building under construction performed by one of the assessing organizations cooperating with the bank.

 

 

Attention

Due to the change in the foreign exchange rate, the actual annual interest rate and the amount of loan repayments may change.

If you fail to fulfill or incompletely fulfill your obligation,  within three business days this information will be provided to the credit bureau  where your credit history is formed. Having a bad credit history can negatively affect your creditworthiness in the future. You have the right to receive your credit history report for free once a year from the credit bureau.

Your property may be confiscated by law if you fail to make your interest and loan repayments on time.

In case of insufficient funds to repay your credit liabilities, they may be repaid at the expense of your other property and/or that of the guarantor, as prescribed by the RA legislation.

In accordance with the RA Law on Combating Money Laundering and Terrorist Financing, on the basis of the Know Your Customer Principle, the Bank may require the Customer to provide additional documents or other information, as well as ask questions during verbal communication, for the purpose of conducting due diligence of the Customer.  

The Bank may collect additional information in accordance with the terms of an agreement with the US Government under the Foreign Account Tax Compliance Act (FATCA) to determine your eligibility for being a US taxpayer.

The Bank is entitled to modify and supplement the tariffs for additional services provided by notifying the Customers in accordance with the contract, by posting a relevant message on its own website ( www.conversebank.am), by posting announcements on the Bank's premises, by sending a notification by post, and by any other methods  proposed by the Bank selected at the Customer's preference, which is considered a due notification of the Customer.

If the requested credit facilities are provided also or exclusively for the purpose of refinancing your other credit liabilities with other entities (banks, credit organizations, etc.), we hereby warn you that you are required to repay outstanding interest, penalties, servicing, and other payments to those entities after refinancing, and the Bank shall not be liable for any failure from your side to perform these obligations.

 Factors for positive or negative decision on providing the loan
The Bank is inclined to provide the loan if:

  • The applicant complies with the terms and limiting conditions of the loan,
  • At the request of the bank, the applicant secures its credit liabilities with collateral and guarantee.
  • The applicant is recognized as creditworthy as a result of the assessment,
  • The documents and references submitted by the applicant are reliable and include all necessary information;
  • The applicant's credit history is either positive or missing.

Failure to comply with any of the above conditions, as well as other requirements of the Bank's internal regulations, may result in refusal to provide the loan.

Time periods for notifying the customer of the decision to provide the loan and for the loan disbursement.

  • The decision takes a maximum of 10 banking days.
  • The Customer is informed within one day.
  • Loan agreements are concluded within a maximum of 3-5 banking days after the Client submits the complete package of documents to the Bank.
  • The actual loan is provided to the client as soon as he/she receives the certificate on the right to pledge from the relevant state bodies.

Venue for loan formalities and method of disbursement

Loan is provided at Head Office and Branches
The loan amount is disbursed to the borrower by way of depositing it to the borrower's bank account.

Your financial directory

Your financial directory at www.fininfo.am , is an electronic system combining services offered to individuals that makes it easy to search, compare and find the most effective option for you https://www.fininfo.am/compare-mortgage-loan.

Procedure for resolving disputes

Any disputes and disagreements between the Customer and the Bank shall be resolved first by mutual negotiation, and should the agreement not be reached by such methods, the disputes and disagreements shall be resolved in accordance with the procedure prescribed by the RA legislation both per court procedure, and through financial system obmudsman.

Notice on Financial System Mediator

Please be informed that according to the RA Law on Financial System Mediator, in case of property claims arising out of services rendered to you by Converse Bank CJSC, disputes and disagreements for not exceeding million AMD or equivalent foreign currency may be resolved through the Financial System Mediator.
According to an agreement between the Bank and the Office of the Financial System Mediator, the Bank waives the right to challenge the Financial System Mediator's decisions only in relation to property claims not exceeding 250,000 (two hundred and fifty thousand) AMD or equivalent currency, and on transaction amounts not exceeding 500,000 (five hundred thousand) AMD or equivalent foreign currency.

Address: 0010 Yerevan, Khorenatsi str. 15,
"Elite Plaza" business center, 7th floor
Email: info@fsm.am
Telephone: (+37460) 70-11-11
Fax: (+37410) 58-24-21:

Contact with the Bank

For more details and more information you can:

  • visit the Bank's website at https://www.conversebank.am
  • visit the Bank's Customer Service at the Head Office or any branch
  • Call: 374 10 511211
  • Viber: 374 95 511211
  • Skype: conversebank-callcenter